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Class warfare: Exotic car owners in MA got massive tax break

Owning a high-end car? Fun. Paying the hefty vehicle tax on it? Not so much -- that is, unless you live in the state of Massachusetts. From the late 1990s to 2007, the state's Registry of Motor Vehicles missed collecting $32 million a year in annual taxes because it used the NADA database to calculate them for some 131,000 exotics or otherwise premium vehicles. Unfortunately for the RMV, NADA's database excludes high-end luxury vehicles, so there was no proper way to tax those cars in the state. If, for instance, you purchased a Bugatti Veyron, instead of paying many thousands of dollars, you could have wound up paying no more than the owner of a Ford Focus.

This is going to suck for owners of affected cars, as the taxman comes to collect what he missed the first time around, right? Wrong. Folks who purchased an affected vehicle through 2007 are completely off the hook. The commonwealth has decided that trying to collect the over $300 million it missed over all those years would be an administrative and legal nightmare. That's a win-win situation for premium car owners in Mass. that's sure to torque off the regular guy, whom the government had no trouble finding and collecting from, as usual. What's scandalous is that no one at the RMV figured this out until now. Bay Staters, that's you're local government (and those tax dollars it collects) at work.

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Anonymous

Anonymous

6 Years Ago

I am certain that, being the "socially just" people the Kennedies are, they are all rushing down to the Mass. Revenue dept to pay the back-taxes so as to provide for the little people they vow to protect in every campaign.

Anonymous

6 Years Ago

For people not familiar with this tax there is an excise tax on vehicles in Massachusetts. It is based (very roughly) on the value of your vehicle.

It's a property tax that is designed to hit people with more valuable cars with a bigger tax bill. They really don't care if the car gets driven twice a year or twice a day. It's about the value of the cars in your garage so missing out on taxing the most expensive cars in the state seems like a pretty big screw-up.

Anonymous

Anonymous

6 Years Ago

Who cares?Why should more expensive cars pay more tax?dont exotic car owners generally drive significantly fewer miles in them than other cars, causing less congestion, less wear on road surfaces and all that.

Here in uk a big thing recently has been about car tax changes, larger cars (SUV's ect...) end up paying the equvillent of 1000 dollars a year for the right to drive on public roads but very small cars (eg under 100g/km emmisions (and hybrids maybe?? not sure)) dont have to pay any. Stupid in my opinion, all cars use the roads.

I think car tax should be abolished and the income deficite should come from proportional increases in fuel duty. May sound insane at a time of 9 dollars per gallon fuel here today but it is fairer and will encourage less unnessesarry usage of cars unlike car tax which is just a yearly kick in the balls.

Anonymous

6 Years Ago

So no, i don't agree with most of your points.

First off, the reason why people who own SUVs have to pay more compared to small and low emission car owners in the UK is based on environmental reasons. You're pretty much paying to have the privilege to pollute more, a concept that is flawed, but quite popular in Europe. Ideally, the taxes would then go to promote green initiatives.

Second, the reasons for higher taxes for more expensive cars are similar to why we use a progressive tax system. When you can't afford as expensive a car you don't have to pay as many taxes and you can then use that money for other things that may allow you to increase your wealth. It's an form of automatic stabilizer for the economy.

Also, a duty on petrol instead of taxes on cars assumes that we're going to be using it for a long time. People who drive hydrogen, ngv, or electric vehicles wouldn't have to pay any taxes for driving. Maybe they'll get some sort of tax break for environmental reasons, but they shouldn't be exempted completely from any tax. It wouldn't be smart to reform the tax system based on a petrol duty because as we switch to alternative forms of energy we would have to reform the tax system yet again, which costs money.

Anonymous

Anonymous

6 Years Ago

No wonder 80000 people a year are leaving this state. This is outrageous. The excise tax is the biggest ripoff of alltime. The money is supposed to be used for road repairs, but it isn't. The tax used to be $66 per thousand valuation of your car in the old days. Now it's $25 per thousand. The residents of this state should be appalled that this happened.